Progress in Solving Fisheries Problems Threatenedby Marty Smith | October 3rd, 2011
posted by Erica Rowell (Editor)
This is a guest post by Martin D. Smith, the Dan and Bunny Gabel Associate Professor of Environmental Economics at Duke University.
Could a new House bill undo the 2006 fix to our fisheries problem?
The Backstory on U.S. Fisheries Management
When it comes to the problems plaguing our oceans, they can seem almost as deep as the deep blue itself. But if you had to boil down our fisheries failures to one root cause you could blame the inability to exclude users.
Scientists call it the “tragedy of the commons” — the problem of an owner-less system. When no one owns the ocean, there are no incentives to restrain the amounts of fish taken from it, a situation that imperils both the biological health of the resource and fishermen’s livelihoods. Without the investment of ownership, each fisherman races to catch the fish before the other guy, and the results are overfishing and economic hardship. (Read more here and here [pdf].)
The centerpiece of U.S. fisheries law is the Magnuson-Stevens Fishery Conservation and Management Act. First enacted in 1976 and amended many times since, the bill had a core mandate to end overfishing by limiting catch in federally managed fisheries. But its means to accomplish this initially focused on the problem’s main symptom — overfishing — not the cause. By not addressing the exclusion problem noted above, managers began controlling biological overfishing while inadvertently worsening the race to fish. Why? Though aggregate catch limits can maintain a biologically healthy stock, they also give fishermen the perverse incentive to build more and bigger vessels to catch fish before their competitors.
Problems were exacerbated when, to enforce catch limits, managers had to shorten season lengths, forcing gluts of product onto the market and the need to sell frozen fish. (Ever wonder why that’s such a prevalent choice at the fish counter?) Most notoriously, perhaps, was the economically wasteful derby in Alaska‘s Pacific halibut fishery which by 1994 had shrunk the season to fewer than three days, with costly results.
In 1995 a better solution surfaced: a transferable quota program that set the total catch based on biological assessment and divided the catch into tradable shares. Similar to programs in Iceland [pdf] and New Zealand, this system launched in only a handful of U.S. fisheries. But after it helped transform the Pacific halibut fishery into one of the great success stories in fisheries management — a 245-day season with a flow of fresh, high-value seafood to the market — the 2006 reauthorization of Magnuson-Stevens aimed to replicate the success story with similar tools.
These new tools — called Limited Access Privilege Programs (LAPPs) or catch shares — include tradable and non-tradable fishing quotas and territorial use rights in fisheries (TURFs). Catch shares address the cause of overfishing by solving the exclusion problem, thus aligning fishermen’s incentives with the objectives of fisheries management.
Then Along Came a Bill
Now a new bill in the House, introduced by Jon Runyan (NJ-R), Walter Jones (NC-R), and Ileana Ros-Lehtinen (FL-R), threatens all this progress. Called “Saving Fishing Jobs Act of 2011,” HR 2772 would effectively make it illegal to develop new catch shares. And so, rather than prevent hardships, it could lead to unintended consequences that exacerbate economic problems in fishing communities and, its title notwithstanding, could even eliminate fishing jobs. Potential vehicles for harm include:
- a problematic definition of eligible fishermen,
- the way in which “jobs” are implicitly defined,
- the termination clause for catch shares, and
- the language on fee collection for running catch shares.
‘Eligible Fishermen’: A Problematic Definition
HR 2772 defines eligible fishermen as permit holders and requires two-thirds of them to approve a new catch share. But in some fisheries as many as half of the permitted vessels have recorded minimal or no landings at times. So, if one of these fisheries were to transition to a catch-share program, non-fishing permit holders would in all likelihood receive no initial quota allocations. That would spell trouble for those non-fishing permit holders, so they would most likely oppose the catch-share program. Thus, the bill effectively gives them free rein to block the ability of actual fishery participants to approve a program that would generate economic value for the fishery and the fishing community.
Even in fisheries that experience some consolidation after establishing a catch-share program, the issue of jobs is more complicated than just numbers of permit-holding fishermen. Many fishing jobs are by nature seasonal or part-time, but once the race to fish is eliminated, they can become better-paying, year-round jobs.
Consider this hypothetical: Suppose 10 seasonal fishermen each make $10,000 per year, generating a total of $100,000. After a catch-share program is set up, suppose now five fishermen make $40,000 per year fishing year-round, bringing in a total income of $200,000. The smaller number of full-time fishermen produces both economic growth and added revenues in coastal communities. These benefits would need to be weighed against the loss of some part-time jobs, of course, but HR 2772 doesn’t have any way to address that and would force managers to choose part-time over full-time jobs.
Another part of the bill, which would terminate any new catch share if the number of permit holders dropped 15 percent below the previous year’s, could inadvertently end a program that successfully reduces redundant capacity, generates economic well-being, sustains healthy fish stocks, and is popular with fishermen. In my experience working with individual-level data in fisheries, permit-holder numbers naturally fall over time due to changing circumstances and retirements. The bill’s language doesn’t account for such natural attrition and would falsely attribute all attrition to the program.
Finally, the language on fee collection appears to inflate catch-share costs because it includes the costs of observer coverage. Many argue that fishermen should pay for the privilege of harvesting a public trust resource. The bill would force fishermen to absorb all of these costs with a catch share
in place, but without one taxpayers would absorb all of the costs. Which would you choose if you were a fisherman? Cost recovery is a reasonable expectation for fishermen who receive preferential access to our precious resources, but a sudden change to full cost recovery could fall victim to political inertia and inadvertently preserve the inefficient status quo.
It took decades for fisheries management to evolve from treating symptoms to addressing the root cause of overfishing. Now in one piece of legislation we risk undoing much of that progress and hindering further improvements.
Dr. Martin D. Smith studies the economics of marine resources, including fisheries, marine ecosystems, and beaches, with a particular interest in combining econometrics with bioeconomic modeling to analyze fisheries management.filed under: economy, faculty, food, guest, oceans, overfishing
and: catch limits, catch shares, economics, fish, fisheries, fisheries management, fishermen, HR 2772, Iceland, LAPPs, Limited Access Privilege Programs, natural resources, New Zealond, observer coverage, Pacific halibut season, Saving Fishing Jobs Act of 2011, tragedy of the commons, U.S. Congress